Honda and General Electric form strategic alliance in the business jet engine market

Honda Motor Co., Ltd. and General
Electric Co. (GE) today announced the formation of a strategic
alliance to produce a new jet engine for light business jets.

The basic agreement was signed today at Honda Motor headquarters
in Tokyo, Japan, by Takeo Fukui, President and CEO of Honda Motor,
and David Calhoun, President and CEO of GE Transportation, a business
unit of GE, which is headquartered in Fairfield, Connecticut, USA.

Today's agreement establishes the framework under which Honda and
GE will further develop and certify Honda's new HF118 turbofan jet
engine. Honda started its jet engine and aircraft projects in 1986,
and has been developing the lightweight HF118 engine, in the 1,000 to
3,500-pound thrust class, since 1999.

The HF118 has run more than 1,400 hours, including ground tests
and more than 200 hours in flight tests on an existing flying test
aircraft. In addition, two HF118 engines have powered Honda's new
experimental compact business jet, the HondaJet, in flight tests that
began in December 2003.

The Honda/GE basic agreement includes: joint certification of the
HF118, joint marketing activities under both companies' joint brand
with airframe manufacturers, and continued discussions on the
business structure under which the two companies will mass produce
the engine. Honda and GE have been in discussions for more than a
year, and expect to sign a formal definitive agreement later this
year.

"We have great respect for the technology, design and performance
built into Honda's HF118 engine," said GE's Calhoun. "There are
tremendous benefits to Honda and GE entering the business jet engine
market together. Honda is the world's leading producer of engines for
motorcycles, automobiles and power products with superb technology.
We are delighted to form a strategic alliance."

"This is a great step forward for Honda to enter the aviation
business, which has been a dream of the company since its creation,"
said Honda's Fukui. "We aim to commercialize our compact jet engine
business by merging mutual strengths: Honda's HF118 turbofan engine
technology, and GE's technology, sales, and support through a spirit
of equal partnership. We are confident in forming an alliance with
GE, which is the leading manufacturer in the jet engine industry."

The emergence of smaller, relatively inexpensive business jets,
which seat from four to eight passengers, creates the potential for
considerable engine sales for future business and personal travel.
Honda and GE envision an annual market in the future for
approximately 200 or more of these business jets. Small business jet
applications include owner operators and fractional owners, as well
as potential "air taxi" operations. The "air taxi" business involves
micro jets flying passengers on short stops using the vast number of
small airports not serviced by major airliners.

Jet engine technology is also driving market change. In the 1990s,
GE took its jet engine designs for large airliners to regional jet
passenger aircraft, a market previously dominated by
propeller-driven, turboprop aircraft. Now, Honda and GE will bring
their expertise to a new generation of smaller, lightweight, low
cost, and highly efficient turbofan jet engines with the lowest
operating costs.

Honda (NYSE: HMC) is one of today's leading manufacturers of
automobiles and power products and the largest manufacture of
motorcycles in the world. Honda has always sought to provide genuine
satisfaction to people worldwide. The result is more than 120
manufacturing facilities in 30 countries worldwide, producing a wide
range of products, including motorcycles, ATVs, generators, marine
engines, lawn and garden equipment and automobiles that bring the
company into contact with over 17 million customers annually.

GE (NYSE: GE) is a diversified technology and services company
dedicated to creating products that make life better, from aircraft
engines and power generation to financial services, medical imaging,
television programming and plastics. GE operates in more than 100
countries and employs more than 315,000 people worldwide.

The company traces its beginnings to Thomas A. Edison, who
established Edison Electric Light Company in 1878. In 1892, a merger
of Edison General Electric Company and Thomson-Houston Electric
Company created General Electric Company. GE is the only company
listed in the Dow Jones Industrial Index today that was also included
in the original index in 1896.